Goldman Sachs in Acquisition of Mortgage Servicer Litton Loan Servicing

December 10, 2007

Cleary Gottlieb represented Goldman Sachs in its successful acquisition of Litton Loan Servicing, LP (“Litton”), a wholly owned subsidiary of Credit Based Asset Servicing and Securitization LLC (“C-BASS”), and in an option to purchase a 45 percent stake in C-BASS. C-BASS is a joint venture between Mortgage Guaranty Insurance Corporation and Radian Group Inc., two of the United States’ largest mortgage insurers, and a leading issuer, servicer and investor in credit-sensitive mortgage assets. Litton is a mortgage servicing company specializing in loss mitigation and default management for residential loans, servicing more than 400,000 customers nationwide. The transaction was driven by liquidity difficulties experienced by C-BASS and the current downturn in the subprime market, which caused C-BASS to be in default on many of its debt obligations.

Following an intense auction process, Goldman Sachs was selected as the winning bidder and a purchase agreement was executed in September 2007. C-BASS, Goldman and creditors of C-BASS then negotiated and executed an out-of-court restructuring agreement in November 2007 to give C-BASS additional liquidity and to limit the ability of creditors from exercising enforcement remedies until January 15, 2010. Proceeds from the Litton sale were used to pay a portion of C-BASS’s secured debt. The Litton transaction closed on December 10, 2007.